Kuwaiti stocks dip to three-month low in summer lull

(AFP, KUWAIT CITY) – The Kuwait Stock Exchange (KSE) closed the week Wednesday at a three-month low amid a traditional summer lull in trading and the government's reticence to implement any economic r

(AFP, KUWAIT CITY) – The Kuwait Stock Exchange (KSE) closed the week Wednesday at a three-month low amid a traditional summer lull in trading and the government's reticence to implement any economic reforms.

The KSE index closed at 1,381.5 points, down 0.3 percent on the week, 4.2 percent on the end of 1999 and a staggering 51.3 percent on its all-time high in November 1997.

The week's trading value dropped sharply to a daily average of just over two million dinars (6.5 million dollars) from over three million (9.8 million dollars) in past weeks.

"It's a combination of negative factors. No action on promised reforms. No amendment to the bad debt law, and above all no dealers to trade on the market because of summer holidays," one analyst told AFP.

"What we see here is more committees. No decisions and no action -- the outcome is negative", he said.

Kuwaiti businessmen, represented by the Chamber of Commerce and Industry, have held two meetings with Foreign Minister Sheikh Sabah al-Ahmad al-Sabah to call for the speedy implementation of reforms and an amendment to the bad debt law.

The bad debt law stipulates methods by which hundreds of debtors, mostly big businessmen can repay some 20 billion dollars in bad debt to local commercial banks. The debt was purchased by the government in 1992 by issuing treasury bonds.

Although the law lets debtors off more than 55 percent of the original debt without interest, influential debtors have been pressing for more government concessions amid opposition from MPs.

Parliament voted in May to allow foreigners to own stocks and trade on the KSE, in what economists and MPs have dubbed an essential step for economic liberalization, but no regulations have been issued.

Some 85 companies with market capitalization of about 20 billion dollars are listed on the KSE, the second largest bourse in the Arab world after the NCFEI in Saudi Arabia.